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The future is old: Why investing in refurbished items is a good idea

Reduced incomes, long hours spent at home, and the constant upgradation of technology have led to a tremendous surge in the demand for refurbished items, across the board
 

Published: 31st October 2021 05:00 AM  |   Last Updated: 30th October 2021 11:35 AM   |  A+A-

For representational purposes

Fashion designer and woman-about-town Neeta Raheja prides herself on being a trendsetter. Friends and family members of this Delhi-based dilettante often turn to her for sartorial and other advice. In turn, she feels pressured to keep abreast of the latest fads at all times. Fondly recalling her first-ever mobile phone in the early noughties—a small flip device from Motorola, gifted to her by a generous uncle—she says, “Those days were so simple! I was the ‘cool’ one because I had my own phone when my peers didn’t, and honestly, it was only to make extremely expensive phone calls to my boyfriend, or send cryptic texts when it wasn’t possible to chat.” Everything is so different for her now. “My seven-year-old son makes fun of me for not having the ‘latest’ model of the iPhone! Sadly, my work also depends on keeping up appearances for my social circle, so the last couple of years have been quite tough. My husband’s business took a big hit from the pandemic, and my clothing business has just about to picked up again,” she laments. 

Unable to keep pace with the rapid developments in this field, Raheja recently invested in a renewed mobile phone on the quiet. She plans to buy a renewed laptop next and is hoping to convince her husband that their next luxury vehicle should be a pre-owned and refurbished one too.

The pandemic has altered the economic conditions of many, making it difficult for people accustomed to a certain kind of lifestyle to re-adjust to being, if not frugal, at least more conservative in their expenditure. Many people are happily choosing the refurbished route, both for the proffered monetary savings and to reduce the negative impact of over-production on the environment.

Driven by the demands of consumerism, technologies and products keep improving and humans naturally desire to stay updated with the best. This has led to a surge in the refurbished goods market in India—always popular as an economical option, but now a thriving entity. In 2015, the used-goods market in the country was valued at `115,000 crore by Assocham, and was expected to reach $12-15 billion in 2020, indicative of a growing appetite for pre-owned goods.

This data was further boosted by the findings of global industry analysis firm Counterpoint Research in 2019, which recorded the sale of 14 lakh second-hand smartphones in India, a growth of 14 percent from the previous year. Their data noted that recycled automobiles commanded the highest market share in this organised sector with 60 percent, electronics, including smartphones, had 25 percent, and other products such as home and kitchen products and apparels claimed 15 percent. 

Sign of the Times
Most Indians will admit to having grown up believing that resale has inherent value. Chennai-based teacher Smita Diwakar attests to selling unused items to her local scrap dealer at least once a year. These include minor things like rusty spoons and forks, and bigger ones like outdated television sets, discarded bicycles and even an old car. “If someone can get use out of it, then why not? I believe it’s a good practice. Of course, some items the scrap dealer doesn’t buy directly from me, but he’s very well-connected and knows exactly who to sell to,” she shares.

For decades, the second-hand goods market in India was fragmented and unorganised, run exclusively by small-time local players. But things are changing as India goes digital. E-tail platforms for re-sale of goods like OLX and Quikr have expanded tremendously in the last few years, and with the entry of more prominent market players such as Amazon and Flipkart, things are set to change further.

On Amazon Renewed—the e-tail giant’s re-sale portal for quality-checked and renewed items—consumers can access unboxed and refurbished products across 20 categories, including mobile phones, laptops, headphones, and home and kitchen products. Similarly, Flipkart’s 2GUD records high sales of refurbished mobile phones, laptops and audio products. As opposed to traditional C2C platforms like OLX and Quikr, these B2B marketplaces stress quality checks of the products, making them the more popular choice for many consumers.

The 2019 BCG-Altagamma True-Luxury Global Consumer Insight study noted that 80 percent of  second-hand market consumers use online channels for information and to trade, making India well-placed for growth in this sphere. As of January 2020, India’s digital population was recorded at 687.6 million making it the fastest growing online retail market in 2019. The number of digital buyers across the country was estimated to be approximately 329.1 billion by the business data platform, Statista.

Small Player, Big Player 
Fast-diminishing product life cycles, which have reduced from three or four years to a year or two, and the entry of more devices into the market, have further spurred the growth of the market for refurbished items. Neeraj Chopra launched Zobox, an affordable renewed smartphones, electronics and accessories provider that currently caters to Tier II and III Indian cities, in the midst of the pandemic. He explains, “The market size of used items has grown 375 percent after the Covid-19 outbreak, and the demand-supply chain gap has changed the entire industry’s working scenario. Everybody wants to buy cheaper, hence used items—which cost almost 50 percent less than original devices—are highly in demand. We were particularly keen to change this notion of ‘used’ to ‘renewed’ through our proprietary technology.” Zobox ensures high-quality products by putting each of its electronic items through rigorous testing and then repairing them based on the results of those tests. The testing involves a complete diagnostic check-up of the renewed devices.

Greenspace Eco Management has been in this space for over 14 years. Envisioned as a service to recycle scarce commodities out of obsolete electronics, they refurbish laptops, desktops, servers, mobile phones, printers and consumer durable electronics, for corporate firms and individuals. E-waste is recycled in their state-of-the-art plant in Alwar in Rajasthan in an efficient and environment-friendly manner. Founder and CEO Jeevesh Kumar shares, “We started with the vision of recycling scarce commodities out of obsolete electronics. We were one of the early entrants in this market but because the Indian economy is price-sensitive, we had to pivot to a refurbish-recycle hybrid model.” According to Kumar, consumers have become more educated about quality products in recent years, driving sales further.

Refurbished electronics items are sold for 20-30 percent and sometimes up to 50 percent less than their original price tags, making them a lucrative option. The rise in demand for these goods has also led to a rise in prices. Data collected in 2020 by QuikrBazaar shows that the average price of pre-owned products across the home, lifestyle, electronics and appliances categories has all seen an increase compared to pre-pandemic times. Pre-owned products like beds see an average price hike of 29 percent; tablets, laptops and TV sets cost about 13 percent, 22 percent and 18 percent more, respectively. 

Branded Legacy
Used car platforms Spinny and Cars24 witnessed a search engine surge of traffic in September that is, respectively, six and four times more than usual in the period since January 2020. However, it is the pre-owned luxury car segment that has registered the most monumental surge. Jatin Ahuja, Founder and MD of Big Boy Toyz, a company specialising in this sector, says that his business recorded exponential growth after Covid-19. “The pandemic accelerated the second-hand luxury car business to the point of a supply-demand imbalance, and the pre-owned car sector is predicted to register a CAGR of 15 percent in the financial years 2021-2026,” he shares.

According to recent data collected by global market research company IMARC, the second-hand luxury goods market in India is currently witnessing strong growth. Pre-owned antique furniture, footwear, apparel, artwork, jewellery and fashion accessories like bags and watches have all seen an increase in demand. The survey indicates that this consumer behaviour is primarily driven by the growing influence of western fashion trends, an improvement in living conditions and rising disposable incomes of consumers. Increasing environmental concerns are also a catalyst. The advent of various international e-commerce platforms offering overseas delivery options has further encouraged the growth of the pre-owned luxury goods market in India, which is set to continue in the same vein till 2026.

Namisha Gupta, Founder of pre-loved luxury e-commerce platform ReTag, explains, “There has been a massive growth spurt in this market in India because people are more aware of luxury brands but can’t afford them due to the steep price point. In fact, it’s becoming a vicious circle compelling people to buy more and sell more.” Gupta highlights the fact that customers are willing to sell bags bought during the most recent fashion seasons having gotten bored of them—pieces that are still widely available in store. There is a huge demand for monogram pieces from luxury brands such as the classic Birkin from Hermes or Louis Vuitton’s Neverfull, which are near-permanent items in brand collections, despite being launched over a decade ago. Needless to say, these items simply fly off the shelves.

In a similar vein, Devika Khosla, Creative Director of interior design firm The Works Interiors, says, “Today, everyone is looking to upgrade their current lifestyles, which is one of the primary reasons for the increase in the sale of refurbished furniture. Depending on their budget, people decide whether to go for new or renewed pieces. The idea of sustainability also plays a crucial role in people opting for refurbished items, which I think is great.” Highlighting that the revamping of furniture has been an age-old practice in our country, Khosla believes that we are fortunate to have access to skilled artisans who work on furniture pieces for us with precision. She also thinks that interior designers should make refurbishing part of their overall plan, ensuring that precious vintage pieces can be restored and used as art, such as the Pierre Jeanneret Chandigarh chairs which continue to be a rage till today.

The Right to a Future 
Jeevesh Kumar of Greenspace Eco Management points out that for years, a global ‘Right to Refurbish’ campaign has been gaining ground. The Right to Refurbish electronics campaign advocates government legislation to allow consumers the ability to repair and modify their own electronic devices through local stores and services, as opposed to turning to the manufacturers of the devices to repair them. For this, the ready availability of spare parts on the open market is a must.

This concerted global effort has been instrumental in spurring large-scale tech players like Apple and Samsung to turn green and be more open with their spare parts and repair know-how. Kumar asserts, “It’s high time original equipment manufacturers (OEM) like Microsoft, Dell and Lenovo woke up to the tremendous market potential of secondary devices. They could opt to be a part of this income-generation market by supporting quality refurbishment through the use of genuine spare parts.”

A recently published blog on Amazon India’s website highlights that in 2020, approximately 55.5 million metric tonnes of e-waste were generated, amounting to roughly 7.5 kg per person. Since most electronic items contain lead, sulphuric acid, and beryllium, they necessarily harm the environment if they are incorrectly disposed of. Therefore, choosing refurbished products can significantly reduce the impact of e-waste on the environment.

A renowned financial publication recently hypothesised in an article that the substantial amount of $10.4 trillion given out by governments around the world as stimulus packages to boost consumer spending, has worsened the already severely affected global supply chain. The world is running severely short on everything from microchips for cars, to workers and fuel, necessitating an increasing reliance on refurbished goods.

An interesting example shows that though the third financial quarter is a time of growth for the electronics market, data collected in 2021 by business analyst firm Canalys documents a decline in the sale of personal computers in the US. This was partially due to a shortage of components for certain parts like integrated circuits used in power management and Wi-Fi modules. However, another contributor was the acceleration of sales for this item in the previous year, driven by the universal move to remote work and learning. Some industry players also point out that OEMs have turned their sights on more vibrant and upcoming markets where the growth rate is higher compared to that of a saturated one like America. 

Looking Ahead
All this while, these same OEMs have been driving obsolescence because it is in their interest to sell more. If these global supply chain pressures continue to mount, the world faces a worse economic crisis than the one it has seemingly just waded through. As such, it is imperative for policymakers to work towards ensuring green alternatives to manufacturing. The refurbished goods market is one way to do so. Change is definitely at hand. Recently, Samsung Electronics announced that it would use recycled materials in all its new phone products. It also plans to divert landfill waste and experiment with ocean plastic to make its phones. Apple too has pledged to go carbon-neutral by 2030. It is clear that innovation and improvements in technology will never cease, as humans continue to create and crave all at once. Refurbished items provide an easy route for forward-thinking consumers to keep up with the times and newer technologies, especially in the Indian market where the population is large and the grassroots penetration of electronic devices is just about picking up.

With the festive season around the corner, the refurbished goods market is gearing up for high sales. E-commerce platforms are aggressively pushing sales of their ‘good-as-new’ products alongside attractive festive offers of original goods. As people continue to navigate economic frailty, the wide variety of renewed electronic items, fashion, furniture, home goods and cars sold at a fraction of the market price is a far more attractive option than doling out cash for new products.

All set to launch their line of renewed smart TVs, Neeraj Chopra of Zobox explains, “Everybody wants to buy cheaper items—it is simply human nature. Hence, I don’t see a reduction in this demand for used items for a long time to come. Our company Zobox is raising awareness on renewed products, because that is where the true value lies, ensuring that it’s a win-win situation for everyone. Our main aim is to evolve and present the sale of electronic goods in an economical and trustworthy manner.”

If his words are anything to go by, it seems the long-fragmented local repair and refurbishment market is consolidating together and becoming a force to reckon with. This, coupled with big players pushing recycled goods on their platforms, gives rise to the hope that the future is indeed sustainable.
(Some names have been changed to protect their identity)

Why Invest in Renewed Goods

Much cheaper than buying original goods frequently. Refurbished goods are priced at 20-30 percent, and in some cases even 50 percent less than their original counterparts.

Most sellers of revamped goods offer lucrative buying options like zero-cost EMIs, buy-back guarantees and warranty periods

Refurbished goods conserve and re-use the Earth’s natural resources, making them a more sustainable option

They enable one to stay updated with the latest launches on the market without breaking the bank

With continued virtual schooling and work from home, extra devices are needed, making renewed items an attractive option

Players to Watch for & what they offer

Amazon Renewed: Unboxed and refurbished products across 20 categories, including mobile phones, laptops, headphones, and home and kitchen products

Flipkart 2GUD: Refurbished mobile phones, laptops and audio products

Quikr Assured: Furniture, electronics, bed sets, TVs, and home furnishings

Greenspace Eco Management: Service that recycles corporate e-waste correctly by retracting scarce commodities out of obsolete electronics, and refurbishing laptops, desktops, servers, mobile phones, printers and consumer durable electronics

Zobox: A variety of renewed smartphones, electronics and accessories

Spinny: Second-hand cars in varied price ranges

Big Boy Toyz: 31 brands of international luxury pre-owned cars

ReTag: A large selection of pre-owned international luxury fashion items and accessories

The Works Interiors: Refurbishing antique furniture

Right to Refurbish Campaign

The Right to Refurbish electronics campaign advocates government legislation to allow consumers the ability to repair and modify their own electronic devices through local stores and services—as opposed to turning to the manufacturers of the devices to repair them. For this, the ready availability of spare parts on the open market is a must.

Fastest-moving Brands for Refurbished Goods

Smartphones
Xiaomi: Rs 4,999* and goes up to Rs 30,499
Apple: Rs 3,999*
Samsung: Rs 799*
Motorola: Rs 8,099*

Laptops
Dell: Rs 32,859*
Lenovo: Rs 18,000*
HP: Rs 38,400*

Tablets
Samsung: Rs 8,999*
Xiaomi: Rs 4,999*
Lenovo: Rs 4,000*

Smart watches
Apple: Rs 9,999*
OnePlus: Rs 1,614*
Huawei: Rs 1,398*

Cars
Maruti Alto: Rs 31,356*
Maruti Swift: Rs 5,40,737*
Hyundai Elite: Rs 3,95,084*
Volkswagen Polo: Rs 4,61,786*
Honda City: Rs 7,42,879*

“There has been a massive growth spurt in this market in India because people are more aware of luxury brands but can’t afford them due to the steep price point. In fact, it’s becoming a vicious circle compelling people to buy more and sell more.” 
Namisha Gupta, Founder, ReTag, e-commerce platform

“The pandemic accelerated the second-hand luxury car business to the point of a supply-demand imbalance, and the pre-owned car sector is predicted to register a CAGR of 15 percent in the financial years 2021-2026.”
Jatin Ahuja, Founder, Big Boy Toyz, specialising in pre-owned car sector 

“We started with the vision of recycling scarce commodities out of obsolete electronics... because the Indian economy is price-sensitive, we had to pivot to a refurbish-recycle hybrid model.” 
Jeevesh Kumar, Founder and CEO, Greenspace Eco Management 

“The market size of used items has grown 375 percent after the Covid-19 outbreak, and the demand-supply chain gap has changed the entire industry's working scenario. Everybody wants to buy cheaper, hence used items, which cost almost 50 percent less than original devices, are highly in demand.”
Neeraj Chopra, Founder, Zobox, affordable electronics goods provider 



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